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Clearly do not like the correct scrutiny of the company with the requirements of aim. If there is a delisting there will be two classes of shareholder with kalas laughing all the way to the bank.
I'll add my thoughts on the likely IPO and possible delisting... we discussed a few months ago as MYT have been quite open about "exploring the option" of an IPO in India. It's always been said that, if they went ahead, the Indian company would be listed in India, which is 100% owned by the already-listed UK company. There seems to be an appetite for raising money this way as others (ACME, ReNew, IREDA) are already ahead of MYT here. The problem - and an understandable one - is who's going to buy shares valuing the Indian company at, for the sake of argument, $300m-$1bn, when you could buy shares in the UK company who now that business at just �40m. I don't imagine MYT on AIM will be a ten-bagger overnight either. I wouldn't want MYT to delist for the same fears shared by everyone else - no market and annual dilution. Although if it is to delist for the purpose of listing again in India soon after at a re-rated valuation, could it be a good thing for us? Maybe it means we won't realise the value once thought but we know it's massively undervalued at present and so could still sell at a very decent profit. Any thoughts? Is delisting all bad? I've followed FusionEx a little since their very controversial delisting in the summer. I think you mentioned this one, Hounddog, when you raised a concern of MYT doing the same. From what I've seen so far there haven't been many shares bought / sold yet but those that have have been above the final share price. A lot of people holding shares at delisting said they would hold for future performance / a future IPO. And I haven't commented on the "loan" yet so... This situation's a real mess - whether Ravi stays or goes because of it. I'm trying not to prejudge because when I've seen him speak or read what he's written over the past few years, it's always given me an impression of a honourable man, with a decent track record and a sense of purpose and pride in what MYT was doing. We all make mistakes and can all succumb to greed (maybe that's a little too forgiving) but I just can't see how taking money out of the business as a "loan" at the expense of shareholders can be done with an innocent mind. Still, you never know. It'll say a lot with how much (or little) Ravi decides to explain to shareholders about this situation. I'd like to think he'd talk us through his thinking at the time, give details or the transaction, and apologise for the damage done (reputation, financial, cultural). That would show character and fit with my up-to-now positive impression of him. However if it's a generic statement from the company only, that says a lot too. It's that old adage about reputation.
I'm afraid there is little to be optimistic about the delisting. (as much as I want to be as a holder.) We own shares in Mytrah Energy Ltd. The Indian IPO will be in Mytrah Energy(India) Private Ltd (although wont be private once listed!) So, we will not swap the de-listed shares for new shares in Indian entity, we will hold shares in a UK holding company which will own a proportion of Mytrah Energy (India) Private Ltd. Pretty sure this bizarre structure (if MYT retains London listing) was how one other Indian group - EROS? - was done, before that didn't work in raising the value of the UK top co and they moved listing to US. Either way, we will not be getting new shares in Indian co, unless they get rid of the Mauritious intermediary, and and then merge the two.
I was trying to get my mind around the delisting implications. I doubt they have decided exactly what to do. Firstly, I would be a bit surprised if they delist prior to relisting in India. Secondly, Kailas and some big institutions have stakes in topco and I find it difficult to think they want to be stranded in an unlisted entity. Thirdly, without checking Indian listing rules I would be fairly certain they would need to go off the back of audited 2017 full year as 2016 is too old. I expect those results to be good. It was always my fear that they would drag it off the market once it reached an inflection point. These issues must have arisen on the companies Monk and Eddie mention - so it would be interesting for the views of others. I can�t remeber how many votes you need to delist - probably 50% (ordinary resolution); if so Kailas can do that by himself and possibly do things outside Panel protections (although I seem to remember Panel rules also govern any company that has been a plc in the last ten years).
No it�s 75%. Kailas has 60% and Capital Research, PAM and Osrano (Caparo) 25%. 25/85 is 29% - enough to block. So Kailas is going to have to get those guys on board to delist. Why would they, like any minority shareholder, vote for it?
The VP Bob Smith gave at least 2 presentations on an Investors Chronicle podcast in August and a similar one earlier in July on Core Finance spelling out the reasons for investing. I contacted Bob Smith at the time and he rang me from India. One of the questions i asked him if there was any possibility they would delist from AIM and i was told no. Legally i wonder how the company stand after making those presentations where investors built positions only for it to be intimated by 2 sources close to the ipo negotiations that it likely would delist ? MYT say they are undervalued in the UK market but this news article and RKs unauthorised loan tranaction under investigation hasn't helped the share price. With no comment from the company, who is going to buy stock on the UK market if they know the company could possibly delist ?. This creates a further thin market for any seller. So ISA holdings etc can be pulverised. This fiasco is contributing further to the very value of the company in the UK that they hoped to reverse. Bob Smiths interviews should and which are only 12 weeks old, should come under scrutiny and a complaint to the authorities should be made. Down another 14% today and no comment from the company on either the story or the reason for the share price fall. It's 1.20pm (9.20am UK) in Hyderabad.
Also there should be no leakage on IPO discussions - it is clearly price sensitive. I will have a think about complaining to Investec or the company but will likely get the brush off. I am in court today on the Lloyds litigation where one of the (many) matters the claim is testing is management assertions outside formal documents.
I agree ZENGAS - I'd like to see MYT issue a statement. They can stay quiet and say we'll update the market when decisions are made but I feel their hand is forced here. Just a thought that came to me today... a possible future IPO of the Indian company is nothing new - maybe 9-12 months old now - and the potential to delist to do this is also not a new possibility either. So why now? It seems a little too coincidental, to me, that this story comes out now two weeks after the "loan" RNS casts a shadow over the integrity of Ravi / management. If it's not coincidental, then it could be as Skid says: management don't like the scrutiny so want to leave AIM. Or could it be an outside force with an interest in the share price suffering (like it has over the past year). I don't know. I can see both sides. Like we've said before the education and experience of key people is good. Ravi's exited businesses before without spilling investor blood. They've had an excellent track record with MYT over the past 5 years. They've not diluted shareholders when raising money (although maybe that would have been a good thing in hindsight). If there was bad intent here, why would investors trust them with an IPO next time - the internet is already full of these delisting rumours - and they'd probably suffer in valuation because of it. I'm just not seeing it. But then I accept I'm probably being blind. I just have a feeling the press speculation on delisting would never have come out if the unauthorised loan RNS had not preceded it.
Yes Monkf6 i was thinking the same thing about this anonymous de-listing talk, and the previous 'loans' being a coincidence. Also i couldn't understand why the market view (reflected in the share price) was so ambivalent about the loan, and now again about the de-listing. It's down but only at levels seen earlier this year. Something doesn't feel right here, feels like someones got an agenda, tho I know very little about corporate finance so i can't really speculate about what might be going on behind the scenes...
On the comment below re shareholding, the second largest holding (Esrano Overseas) is controlled by Kailas. Mytrah's website discloses that 72.6% of shares are not in public hands, the 57.9% trust + 14.7% of Esrano. As regard other investors, there are no rules as such (as far as I am aware) that restrict such holders being offered shares in the new listing at whatever holding/price they can agree between themselves. You will then be left with a minority of holders holding paper in a delisted holding company or forced to sell back the shares to recoup some value. The valuation of these holdings on AIM is peanuts, and so if you could offer and buy back these shares for peanuts before listing in India (which based on valuations of other similar renewable energy groups being quoted in Indian press) on mulitples of the current valuation with you holding an increased amount, why wouldn't you? I had bought in with the long term expectation the shares would be re-rated on a new Indian listing - it seems the company will, but we as small shareholders will be denied that result, and in fact suffer losses on the ever decreasing valuation of the group here in the UK.
Eddie - Esrano might not be controlled by Kailas. Hounddog knew a little about this (see an earlier post a few months ago). It was the investment vehicle for Angad Paul who committed suicide last year in London when the family steel business collapsed. We're not sure what relationship (if any) there is between the families or if there was a fall out years before when the company changed its name to Mytrah and Angad left the Board. If anyone knows more, please do share. After your post, I went to MYT website to have a look too and we finally now know who the big seller has been over the past several months: Henderson Global Investors. They owned approx. 20% of the publicly traded shares but appear to have sold all 8.5m between May and Sep. I'm not sure what impact the share options granted could / would have in any desire to delist. It appears Ravi transferred 11.5m options to his Trust last year. It also looks like there were 300,000 employee (not directors) share options granted in the Indian company. This is all new territory for me and my only experience is in small Ltd companies. There's one class of ordinary share, each holding one vote so wouldn't Ravi stand to lose the most if the holding company's shares became worthless? Go easy.
Oh and another nugget to suggest the press speculation about delisting isn't due to the BOD reacting negatively to the corporate governance scrutiny... they spent best part of $250k on auditors last year and have often highlighted every year how important this is to them. It's funny though how with very little communication, it doesn't take much to start seeing things very differently. I still can't decide if I'm being wet behind the ears and falling victim to confirmation bias OR if I'm actually being measured and balanced. I just can't see Ravi trading in his reputation for a few more million when he stands to make a fortune in any scenario. Maybe I need a towel.
Eddie. I think you are talking about the non-free float not what Kailas owns. I regret I have forgotten the AiM free float rules. I researched Esrano a while ago and I am sure it is Camparo who originally backed the company but I got a sense there was a falling out with. Even though a Jersey company I think it is still subject to the Code (not checked the admission document) which I think could offer some protection in a delisted situation. It helps that at the moment Kailas is UK based. I stand to be corrected.
Esrano is connected to the former Chairman - Hon Anged Paul. See the 2011 annual report (pasted below). 72.6% is not in public hands. Their interests are aligned. Thus there is only 27.4% of share in circulation who have the potential to influence (prevent) the those controlling shareholders undertaking what is in their best interests. From the 2011 report - Note 20, related party transactions. The Directors of the Company who are also considered to be the key management personnel are: 1 Hon Angad Paul � Chairman 2 Mr Ravi Kailas � CEO and Managing Director 3 Mr Vikram Kailas � Chief Financial Officer 4 Mr Rohit Phansalkar � Non-Executive Director 5 Mr Alastair Cade � Executive Director 6 Mr Charles Edmund Wilkinson � Non-Executive Director 7 Mr Philip Swatman � Non-Executive Director The entities where certain key management personnel have significant influence are: 1 Caparo Engineering (India) Limited � Hon Angad Paul 2 Zip Reality Private Limited � Mr Ravi Kailas 3 Bindu Urja Holding Inc � Mr Ravi Kailas 4 Bindu Urja Investments Inc � Mr Ravi Kailas 5 Bindu Urja Inc � Mr Ravi Kailas 6 Esrano Overseas Limited � Hon Angad Paul 7 RKP Capital Inc � Mr Rohit Phansalkar 8 Chakas Investments UK Limited � Mr Alastair Cade 9 Sila Energy Inc � Mr Ravi Kailas
Eddie - I am not as convinced as yourself that Kailas and Esrano are aligned. Obviously MYT was originally called Caparo Energy and a few years ago it changed its name and Paul came off the Board as Chairman. I made the assumption (purely on the public information) there was a falling out but it would be interesting if you have better information. Maybe they have made up.